New Consumer Financial Protection Bureau: Bank of America made billions by screwing homeowners

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The brand-new Consumer Financial Protection Bureau was created to protect American consumers from abusive financial practices and products. The bureau, led by Harvard Professor Elizabeth Warren, is barely off the ground, but is already landing punches. Reports are out today of a confidential presentation for state attorneys general that is doubtless being talked about in offices on Tryon Street.

The CFPB accuses the country’s five largest mortgage firms — including Bank of America and Wells Fargo — of earning more than $20 billion since the start of the housing crisis by taking shortcuts while processing distressed borrowers’ home loans. This soars way beyond “under-serving” customers, and lands firmly in “screwing customers” territory. The CFPB’s dollar figure is intended to help regulators, who are discussing ways of penalizing the banks in a settlement of allegations of wrongful and at times illegal foreclosures. Regulators are said to be considering penalties in the $5 billion to $30 billion range, with most of the penalty going toward lowering distressed homeowners’ mortgage payments.

No wonder the country’s biggest banks are urging their congressional sock puppets to  defund the CFPB.  (FYI, Bank of America handed out $2.2 million in campaign contributions to Congressional representatives and PACs in 2010 — 64 percent went to Republicans, 36 percent to Democrats).

One thing this country seriously needs (among other things) is a populace that’s aware of how, and by whom, they’re being screwed, and are willing to do something about it. That's apparently not a problem in the U.K., which last weekend saw between 300,000 and 500,000 protesters hit the streets of London to protest the new Conservative government’s draconian service cuts, and large financial corporations' tax dodging. The British government, by the way, is coupling its service cuts with proposals for additional, huge corporate tax cuts. As the Guardian newspaper described the protesters’ goals, “they were crying for the wealthiest members of the financial sector — which caused the fiscal crisis — to pay their fair share, rather than having the brunt of austerity measures fall on the backs of the poor and middle class.” Meanwhile, in the U.S., paltry attempts to organize protests in 40 cities fell flat. Welcome to the Land of Clueless Zombies, ladies and gentlemen.

Elizabeth Warren, head of the Consumer Financial Protection Bureau
  • Elizabeth Warren, head of the Consumer Financial Protection Bureau

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